All the restaurant's servers are now on salary with paid vacation and sick leave.

The high-end restaurant only seats 45 guests and the chef’s menu can cost more than $100, so the owners aren't worried about raising prices to make up for lack of tips.

But customers have been confused since the policy went into effect earlier this year. Managers put a note in both the menu and receipt explaining the no-tipping policy, but some diners continued to write a tip on their receipts even though there was no tip line.

The restaurant eventually started circling the explanation on the receipt in red to draw the customer’s attention.

"They’d look up at dinner partner or partners and say, 'There’s no tipping'" said co-founder Scott Rosenberg. "[There's] a moment of, 'Wait a minute, what?' and then, 'OK, that sounds good.'"

Rosenberg said the approach was meant to be more like traditional Japanese fine dining, where tippping isn't done. This way, the diner doesn’t have to "think about how much to leave and make calculations [after] a contemplative and special meal," he said.

Daisy Chung, executive director for Restaurant Opportunities Center of New York, which supports restaurant workers, said she thought the practice of banning tips to provide a salary with benefits was a "good idea," noting that even inclement weather can reduce tipped income no matter how good the service.

"We definitely feel there shouldn’t be a separate system where tip workers rely on tips to subsidize their wages," Chung said. "Workers should be fully compensated."

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